Ready for the Future Before It Arrives

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May 15, 2015


The world is changing faster than ever, increasing the difficulty in foreseeing and planning for the future. What changes can we expect? Equally critical: How can we imagine unforeseen changes that could affect business owners and family enterprises?

 

“Being aware of what the future might bring may not be easy, but it’s something that must be done to help us better manage the risks associated with changes that are occurring around us,” says Michael Cole, President of Ascent Private Capital Management of U.S. Bank.

 

Cole lays out thought-provoking ideas of today’s futurists, divided into six major trends. For starters, a projected global population of 9 billion by 2050 means changes in numbers, values and perspectives are on the horizon.

1. Shifting Demographics

“The growth will increase pressure on natural, fiscal and social resources,” Cole says. “In addition, by 2025 there will be a major shift of wealth and influence from the current generation to the millennials, who have a different take on many social, economic and environmental issues.”

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May 15, 2015


This shift will create potential opportunities for the growth of new institutions, services and products reflecting the values and needs of the millennial generation.

 

“But it also might result in tensions and challenges for multigenerational families with differing views on how to manage their enterprises and for businesses that will likely have a more diverse customer base,” Cole says.

 

Shifting demographics and psychographics — values and attitudes that inform individuals’ behavior — may also drive expansion of virtual social networks, for both good and bad.

 

2. Climate Change: Think Creatively

Although scientists claim global warming is taking place at an alarming rate — the past 30 years were likely the warmest in the Northern Hemisphere in the last 1,400 years — it needn’t be a gloom-and-doom scenario.

The challenges we face can provide opportunities for creative thinking and strategically applied capital to help address the most pressing environmental issues we see down the road.

 

“Brand-new industries and institutions are being created to address these problems,” Cole says. “Jobs that didn’t exist yesterday are here today.”

 

NASA scientist Dennis Sushnell elaborates: “Unless we act, the next century could see increases in species extinction, disease and floods affecting one-third of the human population. But the tools for preventing this scenario are in our hands.”

 

3. Alternative Energy Sources

Reliance on carbon-based energy is destined to diminish as clean, renewable energy sources are developed. This is a practical turn of events in response to the prediction that worldwide demand for energy will outpace the supply within 25 years if we continue to rely solely on carbon-based energy.

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May 15, 2015


“The potential adverse economic implications are leading to a revolution in energy generation, distribution, storage and efficiency,” says Cole, noting that this trend offers huge opportunities for investment and new job creation.

 

In fact, Paul Polman, CEO of Unilever, recently noted that global investment in clean technologies today stands at $300 billion annually — and that 75 percent of the world’s largest companies have developed and incorporated environmental and social policy goals.

 

4. Continuous Advances in Technology

Technological innovations are changing how we live, do business and communicate at a rapidly increasing pace. The possibilities are enticing and apparently endless, say futurists, who point to:

  • Robots and artificial intelligence — changes how and with whom we interact
  • 3D printing­ — technology destined to “creatively destroy” how we do business
  • Data transmission to automatically power devices and appliances — which could lead to technology such as a wearable heart monitor that calls 911 upon detecting a problem
  • Synthetic biology — the design and fabrication of biological components  
  • Digital currency — possibly replacing traditional monetary systems ­

However, using technology to collect, store and share billions of pieces of information digitally may also threaten privacy, leading to additional business development opportunities to put incremental protections in place.

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May 15, 2015


5. Economic Well-Being

Some futurists estimate that more than 2 billion existing jobs will disappear by 2030, but they might be replaced by millions of new jobs in emerging industries or industries not yet developed.

 

“We need to think differently about workforce development,” Cole says. “Jobs of the future will require radically different skills and capabilities. This begs the question: Do we have the right educational models in place to prepare students for future work?”

 

6. Political Uncertainties, Realities

The previous five trends build to the last: possible heightened geopolitical risk and global terrorism. 

“Growing income inequality in the United States could be cause for concern,” Futurist magazine notes. As should food production, which for the first time in human history will be limited on a global scale by the availability of land, water and energy, says Dr. Fred Davies, a professor at Texas A&M.

 

Addressing these challenges will require more cooperation among nations. In our hyperconnected world, isolationism will not be an option, and less political polarization and more practicality will be the order of the day.

 

For more information, read “What Does The Future Hold?” a whitepaper from U.S. Bank’s Ascent Private Capital Management.

 

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